Evolutionary Recource Based Theory & Increasing Returns
3 important questions on Evolutionary Recource Based Theory & Increasing Returns
Positional Competitive Advantage
Positional Competitive Advantage is the result of price theory. Assuming perfect competition: any deviation from the conditions of perfect competition is a possible source of CA. that may allow firms to earn a positive economic profit.
Positional CA:
Market imperfections --> Positional asymmetries (operational efficiency)--> Differences in value appropriated.
Price Theory: a firm's ability to add value logically depends on three things:
- Its knowledge of what buyers are WtP for
- Its knowledge of the Opp. Costs of resources and the services that they can render
- Its knowledge of how to combine the services of resources into productions.
First mover (dis)advantage
Advantage can work in a positive or negative manner, in which the following assumptions are part of first mover (dis)advantage.
- Superior geographic space
- Superior technological space
- Superior customer perceptual space
- Mold cost structure of customers
- affect perpetual space (preferences)
- switching costs
- network externalities
- Head start in developing capabilities.
Pattern recognition/pattern mgt.
Transition strategies:
- Pattern recognition: there are regularities in the development of technology across different contexts.
- Pattern management: critical succes factors change as technology develops over time.
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